Indian Wealth Management JV for South African Group

Nick Parmee

16 September 2008

Sanlam Investments, a subsidiary of South African insurer and investment manager Sanlam, is to invest $22.5 million in a joint venture with Indian securities broker SMC, according to local media reports. The sum will be divided between an asset manager, a wealth management business and a direct stake in SMC.

The bolt-on transaction in India, the first by Sanlam’s investment arm, has been funded from the group’s offshore resources, part of its cash pile of R3 billion (about $370 million) at June 2008.

Chief executive Johan van Zyl has said that the first aim will be to invest the cash in “value-adding strategic initiatives”; his investment return hurdle is 16 per cent, giving a clear idea of his expectations for the venture.

Sanlam Investment Management head Johan van der Merwe is quoted as saying that with the Indian savings ratio at 30 per cent the new venture could be a significant contributor with a market share of between 2 per cent and 5 per cent of the savings market by 2015.

Sanlam emerging markets chief executive Sanjeev Gupta will head the new venture.